Win Semiconductors Corp (穩懋) yesterday warned that revenue this quarter would contract 10 percent sequentially as clients have scaled down orders for all product lines to digest surplus inventory.
The company forecast a double-digit percentage decline in shipments for most of its products.
Win Semiconductors is the world’s leading gallium arsenide wafer foundry services provider for monolithic microwave chips and radio frequency chips.
The cutback in orders would also spread to its vertical-cavity surface-emitting laser (VCSEL) components used in the iPhone X’s 3D sensing module to enable facial recognition, it said.
“Shipments of [VCSEL for] 3D sensing will continue to fall this quarter from last quarter during the product transition period,” Win Semiconductors vice president Steve Chen (陳舜平) told investors yesterday.
Gross margin would be in the low-30s this quarter, Chen said.
The visibility for next quarter remains vague, as the whole 3D sensing supply chain is still struggling to improve yields, Chen said.
The yield issue would be a key factor affecting the company’s financial performance next quarter, he said.
As a client continues to incorporate 3D sensors into its new smartphones, Win Semiconductors forecast that VCSEL components for 3D sensing modules would have the strongest growth among all of its product lines.
However, the company warned that the growth would be slower than analysts’ forecasts of up to a twofold increase on an annual basis.
Win Semiconductors is Apple Inc’s sole supplier of VCSEL components and that status should remain intact, at least this year, Chen said.
The company in the third quarter of last year started making VCSEL components for California-based Lumentum Holdings Inc that are used in Apple’s TrueDepth front-facing camera for facial recognition in the iPhone X.
The VCSEL components for 3D sensing modules have a better gross margin than the company’s other products, Chen said.
A reduction in orders for 3D sensing components cut Win Semiconductors’ gross margin to 32.4 percent last quarter, lower than the company’s estimate of 34.1 percent, he said.
VCSEL components for 3D sensing modules contributed 16 percent of Win Semiconductors’ total revenue of NT$4.57 billion (US$148.64 million) last quarter, down from 19 percent in the prior quarter, the company said.
Second-quarter net profit jumped 24 percent sequentially from NT$730 million to NT$905 million, driven mainly by a foreign-exchange gain of NT$176 million, while revenue rose 2.31 percent from NT$4.46 billion to NT$4.57 billion, matching the company’s estimate of a low-single-digit percentage growth.
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